Luxurious Investing

Investing in the Luxury sector is fascinating. The investment portfolio is all about the nicer things in life and encompasses many of the things we all aspire toward: luxury hotels, beautiful clothes, fast cars, cool gadgets, fashion, and a myriad of lifestyle elements that you don’t necessarily need but… you definitely want. In short, the sector is just so much more interesting than almost any other because you already know a lot about it. Best of all - the results can be as attractive as the subject matter.

"All that is gold does not glitter" JRR Tolkien

It is easy to assume that Luxury is all about expensive and exclusive things, but that would be to completely miss a fundamental point. Luxury is actually about having something (big or small) that improves the quality of life in some way. And that is true for everyone. So, in simple terms, while a sports car, yacht, or private jet is luxury to some, equally a smartphone, weekend in a nice place, or just a good cup of coffee is luxury to others. Based on this principle, Luxury Fund’s freedom to invest goes beyond the obvious and may just surprise you.

Invest in what you know

Warren Buffett famously said “If you don't understand it, don’t invest in it”. Good advice, which is generally ignored, largely because many investments are difficult to understand. Luxury Fund is an exception to this rule; you will find that you already know almost all of the companies in which Luxury Fund invests. In fact, you are probably already a customer of many of them and so you have a unique insight into, and opinion of, them. That means that your decision to invest (or not) is an informed one. And that is always good.

A heritage of success

When launched in 2007, Luxury Fund was the first fund to focus exclusively on the luxury sector anywhere in the world, and introduced a unique way of defining what luxury means and how to invest in it. The results have been fantastic, with the fund appreciating more than 250% since March 2009*. Today, there are many investment managers that now make an allocation to the luxury sector including those from some of the biggest financial institutions in the world, and our unique view of defining luxury has been adopted by most of them, which is a great compliment. We are proud to say, however, that Luxury Fund is consistently amongst the top performers.

*Performance according to Bloomberg as at 6th November 2015.

Aspiring to a little (or a lot) more

The luxury sector has grown substantially over recent years and this has led to great results for investors, but the really exciting part is still to come. While there will always be a demand from the developed world (USA, UK, Europe and Japan), this is becoming dwarfed by the demand for luxury from the developing world (China, India, Asia, Africa, Middle East and South America) which is growing at an astonishing rate. Why? Two main reasons: The economies of the developing world are growing at a much faster rate, and this is creating new wealth at all levels of society in a way never seen before. With this success comes an aspiration for something a little nicer at every level of society. Secondly, the scale of the developing world is completely different – it is (considerably) bigger.

Consider this:

For every 10 babies born in 2014 in the developed world, 322 were born in the developing world.Since that statistic was determined, China has removed its long held 1 child restriction. 1

Did you know?

Nigeria is the second largest consumer of French Champagne in the World. 2

More than 50% of luxury goods purchased in Europe’s capitals are made by Asian tourists. 3

The global population in 2015 is approximately 7.3 billion. It’s expected that the aspiring middle class will grow by 3 billion by 2030.4

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